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London - A strong eurozone growth spurt failed to stir stock markets on Friday, as concerns about the US economy gnawed at investor confidence.
A day after data showed the US economy has expanded at its slowest pace for two years, fresh data further dampened sentiment as consumer spending came in at a lower than expected increase of 0.1 percent in March despite personal income rising by 0.4%.
Meanwhile annual consumer inflation slid to 0.8% in March.
It also comes in a week during the US held off raising interest rates and the Bank of Japan decided against boosting stimulus to support its country's own flagging economy.
"This week's inaction from two major central banks, namely the US Federal Reserve and the Bank of Japan, has caused the global equity indices ... and the US dollar to weaken," said City Index and FOREX.com market analyst Fawad Razaqzada.
Even data showing that the eurozone economy expanded by a faster-than-expected 0.6 percent in the first quarter as cheap oil and credit made itself felt, failed to boost European markets.
However negative inflation of 0.2% in April took the shine off those figures for investors.
London's FTSE 100 index of leading stocks fell 1.3%, while the main indices in Frankfurt and Paris were down close to 3.0%.
Meanwhile, in late morning trading the Dow was down 0.8%.
The US Commerce Department said Thursday that the world's number one economy grew 0.5% in January-March, almost half the pace expected, and the worst reading since 2014 as consumer spending sputtered.
The news seemed to justify the Federal Reserve's decision earlier this week not to raise interest rates and to lower its expectations for any more hikes this year.
Also this week, the Bank of Japan held fire on monetary policy despite slack Japanese growth, falling prices and a deadly earthquake that caused the closure of factories.
Among large European movers was Sanofi, whose shares slumped 5.4% after US biotech company Medivation rejected an unsolicited $9.3bn bid from the French pharmaceutical maker.
Sanofi vowed it would pursue a hostile bit for the manufacturer of the high-priced, blockbuster prostate cancer medication Xtandi.
In the United States, online giant Amazon jumped 9.5% after reporting a swing into profit from a year ago for the first quarter to $513m, racking up a fourth consecutive profitable quarter.
Besides Amazon, online travel giant Expedia and LinkedIn, the professional online network, also beat earnings forecasts, Patrick O'Hare at Briefing.com noted. Expedia shares leaped 7.7% and LinkedIn rose 1.9%.
"Notwithstanding their good reports, there hasn't been much of a halo effect for the broader market, which seems still to be getting over the shock of yesterday's late, and persistent, tide of selling interest," he said.
Heavyweight Apple continued to tumble after billionaire investor Carl Icahn announced on Thursday he had sold his investment. Apple shares fell 1.6% after suffering a hefty 3.1% loss the prior day.
